Roy Bergold: Tales from McDonald’s | December 2011 | By Roy T. Bergold Jr.

How to Warm Up January

Don’t hit the doldrums in the early weeks of 2012. Use January to do a top-to-bottom evaluation of your stores.

Ah, December. The month of happy faces, snow on tongues, warm giving, good food, loved ones, quiet reflection, The Christmas Carol, talking pets on Christmas Eve, and more sales.  

Enter January. The bills are due and there’s bad weather, lower sales, colds, and nothing to do until Valentine’s Day.  

This year, I want you to do something about January. I want you to use the month to evaluate your store from top to bottom and save and make money.  

We’re going to start with a crew meeting the week between Christmas and New Year’s. Go over the year’s results and next year’s goals. Ask for ways to fix problems and new ideas for sales. Tell them about your project for January. And then celebrate the business and them with a special toast to start the New Year. Maybe give some awards, too.

Now, most of you know that I am an old marketing guy (emphasis on old). But we also need to look at some operations issues, and in the early days of McDonald’s, we were all operations and marketing guys. I know you don’t have a lot of control over a lot of operations stuff, particularly if you are with a large chain, but I do have a few thoughts for you. Use what you can or want to.

Let’s start with addressing food. I used to travel to a lot of co-op meetings in those early days. Our operators were searching for any ways to save money or make money. At each co-op meeting, one of the operators was assigned a specific task while he sat through the meeting, sort of like my mom who used to crochet while listening to the radio. One time, I watched a guy count a whole tin of hamburger pickles, and come up way low of the average slice number there was supposed to be. Same thing happened with patties. They found out the meat company was doing the package by weight instead of patty count, so patties were being replaced by the weight of the cardboard.

The co-op was especially aware of shorty fries. They would lay out the fries by size on a table. Goofy? Maybe, but they saved money.

And then there was the cherry pie. One of our executives saved the day on national TV. The pie was cut open and there was only one cherry. His answer? “Well, we didn’t call it cherries pie.”  

Use January to evaluate your store from top to bottom and save and make money.

Ray Kroc always talked about volume. Sell lots of hamburgers to lots of people, profits will follow. So what about value? Sometimes it is better to sell at a lower price to sell lots of product. You might want to look at your pricing to see if by lowering the price, you can sell much more of the item. And you can make a big deal out of lowering the price.

Watch your size pricing, also. When McDonald’s came out with three sizes of soft drinks, no one was buying the biggest. Besides being a bladder buster, somehow the large got priced at more per ounce than the small. And customers caught it.  

There are two other points on operations. First, take a look at your deliveries and your inventory. Are you being as efficient as you can in getting your deliveries, and in your inventory and stocking procedures? This can cause you inordinate cash flow problems if you have too much in stock.

Second, for heaven’s sake, watch your energy use. A bad heat strip can run 24 hours a day and a bad air conditioner capacitor can cause your system to run three times as hard to keep the place cool. Watch your energy use, and if you see spikes, find out why.  

I’ve also saved a few words for marketing. Besides looking at your advertising, promotions, and public relations plans, do you have a local-store-marketing plan up and running? If you don’t do anything else, at least run a suggestive sell on missing items and up-sizes. Also, display and sample your products if possible. Get the food in the customers’ mouths.  

If you use couponing, know the number of coupons that are redeemed and what the add-on to each is. And ask the customer how often he comes in. If you are doing nothing but feeding your existing customer, you might want to reconsider.

Also, think very hard about what you are couponing. I recently worked with a company that gave away a sandwich when you bought a drink. The opposite might be better.

There are some other techniques to consider. Partner with noncompeting businesses, take advantage of seasonal events like celebrating every holiday with a store party, and find new uses for your store such as catering, service club meetings, and new daypart creation.  

If you have any control, define your brand image and personality, even if it is only in your neighborhood. Give your personality to your store. Become Mr. Restaurant in your community. Study your competition, and emulate his successes with your special touch, avoiding his mistakes.  

Your final task for January: Take a look at your customers. How can you expand the customer base, add additional purchases, and increase the frequency of use? That’s how you increase sales and profits. You don’t need an agency to tell you how to do that.

I bet you can figure it out. And if you are having trouble, ask your fellow operators. In fact, have a monthly get-together at one of the restaurants. Do it informally, but discuss problems and ideas among yourselves.  

So let’s do it. Let’s take next month and analyze our stores. Let’s look for ways to save money and ways to make money. Split up your crew, relatives, and friends into two teams and let them brainstorm. It’s worth a free lunch or a pot of coffee.

Well, another year is over, I think my sixth with QSR. Hubcap, Latte, Cowboy, Kate, and I want to wish the best and happiest of holiday seasons to Blair and Sam and to all of you for reading, taking the time to write, and just being there.

Hope to meet you all on the trail some day.  

Happy Trails and a Peaceful 2012.

Roy Bergold

Roy started his career at the Leo Burnett Company in 1967. Two years later he decided to sell hamburgers instead, and began his adventure at McDonald’s. Starting as an assistant advertising manager, he became manager, national advertising manager, director of advertising and promotion, assistant vice president of advertising and promotion, and vice president of advertising.

Roy retired from McDonald’s in 2001 as Chief Creative Officer. Along the way, he was responsible for U.S., as well as all advertising worldwide. While under his care, McDonald’s earned every creative award possible, including Cannes, Clios, and the Four A’s best five year campaign. Roy lives happily in Payson, Arizona, with his wife, dogs, and horses.